Key Takeaways
Why were most crypto apps affected by the AWS outage?
Most of them still rely on AWS as the sole cloud provider for on-demand computational needs.
Will it be a wake-up call for the sector?
That remains to be seen as uptake of Web3 cloud providers like Akash Network remains somewhat measured.
The Amazon Web Services (AWS) outage confirmed that most Web3 applications are far from being ‘truly’ decentralized.
On the 20th of October, the AWS outage that lasted several hours crippled most protocols, including the Base app, the Ethereum Layer 2 incubated by the Coinbase exchange.
Users were stranded with a ‘zero balance’ glitch display, and other services were temporarily inaccessible.
Source: X
The protocol linked the glitch to ‘testing,’ but nearly half of the internet was impacted on Monday. In fact, even the Coinbase exchange had degraded services.
Other centralized exchanges like Crypto.com faced similar issues, locking users out of trading and transfers.
Is AWS the crypto’s weak link?
Surprisingly, even non-custodial crypto wallets (which grant you full control of funds) were affected. MetaMask, for example, was crippled alongside most Ethereum L2s, according to data from Infura.
Part of the Infura report read,
“The issue has reoccurred due to an ongoing AWS outage, impacting multiple Infura Mainnet JSON-RPC APIs (Ethereum, Polygon, Optimism, Arbitrum, Linea, Base, Scroll”
For perspective, most protocols and apps opt for on-demand cloud services to save on the cost related to computation resources, including the electricity bill. Currently, AWS, Google, and Oracle dominate the field, and Web3 players rely on them.
Think of it as the protocol may be ‘decentralized’, but some of the underlying physical infrastructure is centralized, and can become a risk factor.
So as the AWS outage dragged on for hours, so did most of the Web3 applications and protocols.
Source: Downdetector
Some of the users took to social media to jab Web3 players for the folly. One said,
“So AWS went down, and half of crypto just stopped working. Decentralization vibes are off the charts today.”
As of this writing, AWS has resolved the issue, and services are back online. However, the friction derailed Sunday’s recovery. Bitcoin [BTC] had jumped to over $110K, but it retraced immediately when the outage hit crypto exchanges.
Such frictions on centralized exchanges tend to drive sell-offs similar to the recent flash crash.
It remains to be seen whether players will embrace Web3 alternatives to AWS like Akash Network [AKT], which was somewhat measured as of press time.
Source: Akash (network usage on Akash)
